Stocks up ahead of US jobs report, after China cuts rates

YURI KAGEYAMA
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Japan Financial Markets

A man walks by an electronic stock board of a securities firm in Tokyo, Friday, Sept. 6, 2019. Asian shares rose Friday as investors cheered plans for more trade negotiations between Washington and Beijing and drew encouragement from positive data about the U.S. economy. (AP Photo/Koji Sasahara)

TOKYO (AP) — Global shares mostly rose Friday ahead of U.S. jobs data for August, on renewed hopes for U.S.-China trade negotiations next month, and as the Chinese central bank's cut one of its interest rates.

Economists have forecast that U.S. businesses and governments added 160,000 jobs last month, nearly the same as July's 164,000 gain. That number could reduce the unemployment rate, now near a 50-year low of 3.7%, even further.

As the economy has slowed recently, steady hiring and higher pay has fueled consumer spending, powering the economy through a rough patch stemming from a global slowdown and the Trump administration's trade war with China.

The announcement that more talks were scheduled between Washington and Beijing boosted the Dow Jones Industrial Average nearly 400 points on Thursday.

"Indeed it is a positive sign that meetings will take place at multiple levels," said Zhu Huani of the Asia & Oceania Treasury Department of Mizuho Bank, referring to the talks between the U.S. and China. "As limited progress is expected, there will still be many twists and turns along the way and hurdle for more good news is substantially higher. Therefore, we think the rally could be short-lived without more breakthroughs."

Investors also appeared buoyed by news that China's central bank cut a key interest rate that is estimated to free up about $126 billion in liquidity. That could help increase lending, but is unlikely in itself to prevent a further slowdown in the Chinese economy, says Julian Evans-Pritchard, senior economist at Capital Economics.

Wall Street was poised to open higher on Friday, with Dow futures up 0.3% at 26,788. S&P 500 futures were also up 0.3% at 2,981.

France's CAC 40 was little changed at 5,592, while Germany's DAX was up 0.4% at 12,174 in midday trading. Britain's FTSE 100 slipped 0.1% to 7,265.

Asia closed higher, with Japan's benchmark Nikkei 225 gaining 0.5% to finish at 21,199.57. Australia's S&P/ASX 200 rose 0.5% to 6,647.30. South Korea's Kospi edged up 0.2% to 2,009.13. Hong Kong's Hang Seng rose 0.4% to 26,628.14, while the Shanghai Composite added 0.4% to 2,999.00.

Investors have been worried that uncertainty over the trade conflict and the fallout from tariffs goods imposed by both sides will exacerbate a slowdown in global economic growth and hurt corporate profits.

Negotiations between the world's largest economies have been tenuous and the trade war has been escalating with expanded tariffs on each other's products.

The latest escalation kicked in Sunday, with the U.S. imposing 15% tariffs on $112 billion of Chinese imports. Washington is planning to hit another $160 billion on Dec. 15, a move that would extend penalties to almost everything the United States buys from China. Beijing responded by imposing duties of 10% and 5% on a range of American imports.

U.S. tariffs of 25% imposed previously on $250 billion of Chinese goods are due to rise to 30% on Oct. 1.

ENERGY: Benchmark crude oil slid $1.13 to $55.17 a barrel. It rose 4 cents to settle at $56.30 a barrel Thursday. Brent crude oil, the international standard, lost $1.31 to $59.64 a barrel.

CURRENCIES: The dollar rose to 106.97 Japanese yen from 106.72 yen on Thursday. The euro weakened to $1.1023 from $1.1059.

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Matt Ott in Washington contributed to this report.